What is an APR?

APR stands for Annual Percentage Rate, which represents the yearly interest rate charged on borrowed money or earned through an investment, including any associated fees. It's commonly used in financial products such as loans, credit cards, and mortgages to help consumers compare the cost of borrowing between different lenders. Understanding the APR helps you evaluate the true cost of a loan beyond just the interest rate, as it also incorporates other charges like origination fees. A lower APR generally means you'll pay less over the life of the loan, assuming all other terms are equal.